Singapore’s property auction market saw only four properties sold in Q2 2013 at a combined sales value of S$7.05 million, down 91.6 percent from S$83.44 million in the previous quarter.
“The subdued property auction market in the second quarter is a clearer reflection of the impact of the continuous government curbs in the residential sector, with the last wave of cooling measures implemented in January,” said Grace Ng, Deputy Managing Director of Colliers International.
The market’s lacklustre performance could also be attributed to the shift in demand towards the primary sales market as developers offered various discounts “to cushion the impact of the Additional Buyers’ Stamp Duty (ABSD)”.
The subdued market activity “was further perpetuated by the persistent stalemate between buyers and sellers. While owners are holding on to their property, waiting for an offer that meets their price expectation, home buyers who now have to fork out larger cash outlay – due to the increase in ABSD, higher cash down payment and lower loan-to-value ratios – may take a more discretionary view of home buying”, Ng added.
Buying sentiment was also affected by concerns over the bumper supply of residential units in the pipeline and the stock market sell-off during the May to June period.
Nevertheless, the total sales value in 1H2013 soared 164 percent to S$90.49 million mainly from the sale of five high-value properties in Q1. The figure also exceeds the S$62.44 million seen for the whole of 2012.
“Going forward, in light of stable economic growth in Singapore, the number of mortgagee sales is expected to continue to remain low – not exceeding 10 mortgagee sales every quarter. On the other hand, owners’ sales are likely to remain high, accounting for about 90 percent of the properties put up for auction sale,” noted Ng.
As such, the auction sales volume is expected to pick up in 2H2013 and generate a “total sales value of more than S$120 million” for the whole year.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, wrote this story. To contact him about this or other stories email romesh@propertyguru.com.sg
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